 "G20")
The synthesis paper on cryptocurrency, detailing regulatory and financial issues, and getting member countries on board for implementation of the $200 billion capital adequacy framework as part of multilateral development banks’ reforms are among the top deliverables of the G20 finance track under India’s presidency ahead of the leaders’ summit.
A government source on Wednesday said that within the finance track, the G20 member countries had endorsed 10 and welcomed 17 deliverables as of July. The synthesis note on crypto assets, to be placed in public domain on Thursday and then to be considered by the G20 leaders, has put forth a comprehensive road map and building blocks for each country. It has also highlighted the issues faced by the developing countries. Finance deputies have discussed the need for a template to regulate crypto assets, including a way forward to be put into effect by the International Monetary Fund, Financial Stability Board and a standards-setting body.
“One single country cannot handle the issue of crypto effectively because of the pull and push of technology. It has implications on macroeconomic stability,” the source said.
The finance track, in its push to strengthen the MDBs and make them more nimble for the 21st century challenges, has overcome hesitation in many countries apprehensive about paying more money to create a headroom for additional lending, according to the source. “The US and India have been keen to give greater ambition to this effort… MDBs themselves are encouraged to discuss the scope of implementing the recommendations within their organisation.”
Consensus is yet to be achieved on issues such as bringing a “climate resilient” feature in debt, especially for vulnerable countries with a push back from China, the source pointed out. However, debt vulnerability issues of Zambia, Ghana and Ethiopia have been finalised under the common framework. Sri Lanka is outside the framework.
The G20 finance track has finalised its report on macroeconomic risks from climate change and transition offering pricing and non-pricing solutions to allow for the needs of each country to manage climate change and transition. “Countries should not have just (carbon) pricing as a tool. Key idea of the report is that the transition will have to be inclusive and integrate country specific approaches,” the source said.
The Indian presidency, in order to achieve a broad consensus on the language, has dropped the word climate from “just climate transition” to get Saudi Arabia, a country heavily dependent on fossil fuels on board, sources indicated.
On two-pillar taxation, the finance track has stressed the need for capacity building in countries to deal with digital revenue and enhancing tax transparency. It is learnt that significant contribution on this subject has been made by countries with high exposure to these transactions including the US, China and India.
The leaders' summit will also consider the global report presented in July on tax treaty and facilitating its use for other purposes along with the OECD report on enhancing tax transparency on real estate.
The finance track has also prepared a compendium assessing the macro consequences of food and energy insecurity, talking of greater cooperation in financing and technology for lower income countries. Russia had not welcomed the issue around food security and it will now be on the summit's table to decide the final language on the subject.
While there’s broad consensus on most agenda items, sources indicated that in the backdrop of a war a communique might be difficult to achieve unless leaders manage to come to some consensus.
Sources also said that the finance track had achieved unanimous endorsement of G20 policy recommendations, advancing financial inclusion agenda through digital public infrastructure.
The financial inclusion action plan 2024-26 has also been laid down under the Indian presidency of the G20 and will be discussed at the leaders’ summit.
Global Sovereign Debt Roundtable, a joint initiative of the IMF, World Bank and India, is also being called an important legacy of India’s G20 presidency.
